I do understand everyone loves lower rates... but have you considered other factors? Did your mortgage advisor/broker take their time to explain other aspects to consider?
Important things to consider when getting a mortgage.
1. Mortgage Product (Qualification & Terms and Conditions) 2. Pre payment penalty 3. Rates
In order..
Mortgage Product (Qualification & Terms and Conditions):
Each mortgage product has its own set of rules and conditions. Some might have lower rates but stricter requirements for qualification. It's important to find a product that suits your financial situation and goals.
Pre payment privileges - How much and how often?
Payment increase - Double up payment VS % payment increase
Skip a payment AKA Payment Vacation
Portability policy - Some lenders only allow straight port.
Replacement Policy - Penalty reimbursement
Bona Fide sales clause - can't break the term unless you sell the property.
Cashback Clawback - some lenders will ask you to pay the entire cashback if you were to break the term even 1 day earlier than the maturity date
2 types of variable mortgage product ( ARM - Adjustable payment vs VRM - Fixed payment )
Variable Mortgage (Some lenders cmpd interest monthly)
Standard Charge VS Collateral Charge
Home Equity Line of Credit
There's a lot to unpack...
Prepayment Penalty Risk:
Some mortgages come with penalties if you pay off the loan early or make large extra payments. This can impact your overall cost, especially if you plan to sell or refinance.
Fixed rate mortgages (IRD) Vs Variable Mortgage (3 month Interest Only)
Rates:
While rates are important, they're not the only factor to consider. Sometimes, a slightly higher rate might come with better overall terms, making it a more cost-effective choice in the long run.
Mortgage brokers can be helpful in navigating these complexities and finding the right fit for you. They can negotiate rates and terms on your behalf, but it's essential to consider all aspects of the mortgage, not just the rate.
"Protect you from yourself"
JD Lee
Mortgage Broker (AB)
Submortgage Broker (BC)
Mortgage Agent Level 2 (ON)
M: 1-587-968-1490